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KiwiSaver Statistics December 2008
Category: KiwiSaver
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The continued growth in KiwiSaver saw membership reach 900,509 members at 31 December 2009 with 51% being females. Nearly half opted in via a provider of their choice with 35% going to one of the default funds due to lack of personal choice. Of interest, 136,330 members are aged 17 or under and only 166,795 members are ages 55 or over. Both of these age groups can get considerable value from joining KiwiSaver and membership of these people is expected to be the growth area. Changes being introduced from 1 April 2009 include the minimum members contribution dropping to 2% but anybody availing of this reduced amount should seek financial advice to ensure they are maximising the benefits. Employer chosen schemes are also increasing in number as employers and staff see the benefits of membership through this type of facility. Contact Thorners if you have any questions on how KiwiSaver can work for you or your employees. Click here to email Thorners or Call Us on (04) 528 8088 Click here to view our disclosure statement.
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KiwiSaver Member Tax Credits – what, why and how to get them
Category: KiwiSaver
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What is the member tax credit? If you’re eligible, the Government will pay into your KiwiSaver scheme an annual member tax credit matching your contributions up to $1,042.86 per year (this works out to about $20 per week).
How the member tax credit works The member tax credit year is based on 1 July to 30 June. To receive the maximum member tax credit of $1,042.86 you must have: · been a member of a KiwiSaver or complying scheme for the entire year, and · contributed at least $1,042.86. If you join part-way through a membership year then at the end of the first year (30 June) you’ll receive a member tax credit in proportion to the length of time you’ve been a member. For example, if your start date is 1 January, then by 30 June you’ll be eligible for a maximum member tax credit of $521.43 (half of the annual maximum). How to calculate your membership start date is detailed below. Important: Employer contributions or any contributions you may divert to your mortgage aren’t included when calculating how much you’ve contributed in a year for the member tax credit entitlement. If you belong to a KiwiSaver scheme and another superannuation fund which has a complying fund, the tax credit will be paid to the fund that applies first. Who can get it? To qualify for the member tax credit: · you must be 18 or over, and · your principal place of residence must be in New Zealand, except for: · a government employee who’s serving outside New Zealand · a person who’s working overseas as a volunteer, or for token payment for a charitable organisation named in the Student Loan Act regulations and if the work meets one or more of the requirements set out in the Student Loan Schemes Act 1992. Note: If you turn 18 during the year and meet the residency requirement, you’ll get member tax credit for the portion of the year that you’re 18. When do you get it? Your scheme provider will claim the tax credit on your behalf from 1 July each year – you don’t have to do anything. It will be invested in your account anytime from July onwards, depending on when your scheme provider makes the claim. If you’re an employee and we haven’t received all your contributions from your employer when your scheme provider makes the claim, the balance will be paid once we receive it. How to calculate your KiwiSaver Membership Start Date Please note that due to a successful legislative challenge this is different to previously communicated Active Choice Enrolments 1. If the member joined KiwiSaver between 1 July 2007 to 30 September 2007 and had deductions made from their salary or wages, or made a contribution into their KiwiSaver account prior to 1 November 2007, their eligibility for the member tax credit would commence from the earlier of: · the first of the month in which their KiwiSaver scheme provider received a valid application for KiwiSaver membership; or · the first of the month in which their first deduction had been made from salary; or their first contribution was received by their scheme provider or Inland Revenue. 2. If the member joined KiwiSaver between 1 July 2007 to 30 September 2007 but did not have deductions made from their salary or wages, or make a contribution into their KiwiSaver account until on or after 1 November 2007, their eligibility for the member tax credit would commence on the date their KiwiSaver scheme provider received a valid application for KiwiSaver membership. 3. If the member joined KiwiSaver on or after 1 October 2007 their eligibility for the member tax credit would commence from the earlier of: · the actual date their KiwiSaver scheme provider received a valid application for KiwiSaver membership; or · the first of the month in which their first deduction had been made from salary or wages or their first contribution was received by their scheme provider or Inland Revenue. Enrolments through an employer 1. If the member joined KiwiSaver via their Employer their eligibility for the member tax credit would commence from the first of the month in which their first deduction had been made from salary or wages. How is MTC calculated when membership is less than 1 year? · The government intends to match member’s contributions up to a maximum of 20 a week, for the weeks they are a member. · The annual MTC entitlement is $1042.86, which equates to approximately $2.86 a day (1042.86 / 365). · A member’s MTC is therefore calculated at the lesser of ($1042.86 / 365) or the member’s actual daily contribution rate, for the number of days they are a member during the member credit year. · The member credit year is 1 July to 30 June so a “part-year” calculation is only required in the first and last years of membership. Click here to view our disclosure statement
Click here to email Thorners or Call Us on (04) 528 8088
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KiwiSaver Statistics November 2008
Category: KiwiSaver
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KiwiSaver membership continues to grow with 867,388 members at 29 November 2008, up from 837,908 at 31 October 2008. This still represents only 23% of elegible people under 65 years of age and Thorners continue with their belief that only those that do not understand KiwiSaver are the non members. There are also only 15,942 employers who have partnered with a preferred KiwiSaver provider. Employers seem to be wary of doing this but the benefits of having a financial services provider available to answer staff queries can remove the stress of being unable to provide the financial advice staff are looking for. Benefits of preferred agreements can also include reduced monthly fees on KiwiSaver accounts and free life cover for members. Talk to us soon to see if KiwiSaver is correct for you, your children, your grandchildren and if in business, to see how a preferred agreement can work for you and your staff. Click here to email Thorners or Call Us on (04) 528 8088 Click here to view our disclosure statement.
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Government Approves KiwiSaver Changes
Category: KiwiSaver
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Changes approved by the Government today are attributed to making the KiwiSaver scheme affordable for tax payers, members and employers. There have been no changes to these Kiwisaver provisions…
Changes to KiwiSaver however are…
Thorners is still of the belief that only those that do not understand Kiwisaver are those that are not members. Contact us to obtain more information and a copy of our disclosure statement. Click here to email Thorners or Call Us on (04) 528 8088
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KiwiSaver Mortgage Diversion
Category: KiwiSaver
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Thinking about whether to take advantage of the Mortgage Diversion facility available through Kiwisaver? Before making any decision, there are some things to consider. After contributing to Kiwisaver for 12 months, you can apply for Mortgage Diversion to help pay off your home loan with a portion of your Kiwisaver contributions. If elegible, you can divert a fixed amount up to 50% of your kiwisaver contributions (from the date your Mortgage Diversion request is approved) towards your home loan. Government and Employer contributions cannot be diverted. By doing this you will benefit from paying off your home loan faster. However, you will need to weigh this up against the fact that you’ll also be contributig less to your KiwiSaver account and, ultimately, your retirement savings. Something else to consider is the impact on your potential matching Government contributions. You will need to meet the elegibility criteria and contribute at least $20 per week towards your Kiwisaver account after mortgage diversion payments are allocated. From 1 November 2008, most schemes are looking to charge a $25 set up fee for mortgage diversion and this will be deducted from your Kiwisaver account on approval of your mortgage diversion request.
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Investment Risk Profiles – Default KiwiSaver Schemes
Category: Investments, KiwiSaver
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Are you in a Kiwisaver default scheme?
Does your risk profile match your expectations?
An element of successful investing is paying attention to your risk profile – and understanding what that means for your long-term returns. Your risk profile is about what you want your investments to achieve and your attitude to the risks involved. While this may change over the longer-term, it’s important to understand how you feel about risk before you commit to your investment.
“One of the worst things an investor can do is change their risk profile (which is linked to their investment strategy) because of short term-market moves – you can’t expect to be a high risk investor when markets are booming and a low risk investor when times are tough. The point of a risk profile, or investment strategy, is to ensure your portfolio is structured so you can look past short-term moves to get the result you need.”
By determining your risk profile – such as growth, balanced or conservative – you can understand how comfortable you are with your investment choices, by setting a strategy which is consistent with your risk tolerance.
At Thorners, all clients complete a Risk Profile so that they can gauge their appetite for the various options available and at the end, they have an understanding of why they are investing in a particular fund.
As KiwiSaver Default schemes are conservative, they may not match your investment expectations. Contact us to discuss your options.
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Upper Hutt Spring Festival KiwiSaver Promotion 6th September 2008
Category: Fire and General Insurance, Home Loans, Investments, KiwiSaver, Life Insurance
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Saturday the 6th September 2008 sees the annual Upper Hutt Spring Festival being held in the downtown shopping area. Visit Thorners office at 22 Main Street to check out the great incentives to take out a new KiwiSaver for yourself, children or grandchildren this Saturday. Gifts for children and great prizes for adults have been kindly donated by our suppliers for adults taking the time to discuss their financial or insurance needs with us. Click here to view our disclosure statement. Click here to email Thorners or Call Us on(04) 528 8088
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I’m 64 – Should I take out a KiwiSaver?
Category: Investments, KiwiSaver
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Taking a quote from a prominent NZ financial adviser in last weekend papers, we would have to agree that everybody aged 64 should be in KiwiSaver before they turn 65. So long as you join before age 65 and contribute $20 per week for five years, you will be elegible for the initial $1,000 Government kick start, the tax credit of $1,043 p.a. plus the $40 p.a. fee subsidy. After five years you will have a nest egg of $11,630 plus interest and this won’t have any effect on your National Super payment. Where else can you get a return of 36% without any risk? We could almost go as far as recommending to borrow to top up the payments if you couldn’t quite afford the $20 per week just to get the full return. Even those aged 55 plus should join as the return after calculating in employer contributions will overshadow ordinary investment returns every year. Talk to us soon to get the finer details. Click here to email Thorners or Call Us on (04) 528 8088 Click here to view our disclosure statement
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KiwiSaver Statistics – one year on
Category: KiwiSaver
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After just one year of KiwiSaver some amazing membership statistics are…
Make the call today to see how we can answer your KiwiSaver questions. Click here to email Thorners or Call Us on (04) 528 8088 Click here to view our disclosure statement
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KiwiSaver Mortgage Diversion
Category: KiwiSaver
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KiwiSaver Mortgage Diversion is almost with us. Many KiwiSaver members become eligible after contributing for 12 months and final sign off by the Bank’s and Government is expected shortly. Mortgage Diversion will allow up to half of a members personal KiwiSaver contributions to go towards paying off the personal mortgage on their home, so long as the mortgage provider and their chosen KiwiSaver provider offer this facility. Not all mortgages will qualify for Mortgage Diversion under KiwiSaver regulations, e.g. currently KiwiSaver contributions cannot be diverted into a mortgage that contains a revolving credit facility or a mortgage secured over a property held in a family trust. It is also limited to a saver’s principle residence (i.e. the family home). Secondary properties like holiday homes, investment properties and LAQC’s are excluded. Click here to learn more about Thorners Life Insurance Services or Call Us on (04) 528 8088
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